Effective Negotiation: Principles, Process, and Agreements
Win-Lose Negotiation
A negotiation where one party gains advantages at the expense of the other party’s losses. Every benefit the buyer receives translates into a loss for the seller.
Win-Win Negotiation
Aims to reach agreements where both parties benefit.
Negotiation Elements: Subject, Object, Agreement
- Subjects: Stakeholders who are interrelated and interdependent in resolving the conflict.
- Object: The conflict or issue over which the involved parties must agree.
- Agreement: The result reached after negotiation talks, assuming the parties have found an acceptable solution. Both agreement and disagreement signify the end of a negotiation. Reaching an agreement involves costs, as does failing to reach one. Therefore, each party must assess whether the cost of the agreement is more favorable than the cost of no agreement.
Initial Negotiation Considerations
Form:
- Decision-making capacity
- Taking adequate time
- Establishing a climate of confidence
Substance (The Bottom Line):
- Know the concrete and essential objectives of the negotiation.
- Maintain a clear stance.
- Be prepared to make some concessions.
- Remain flexible.
- Collect relevant data.
- Ensure agreements are achievable.
Key Factors Influencing Negotiations
- Information to be provided.
- Power dynamics or level of influence over the other party.
- The necessity of achieving the target/objective.
- The environment surrounding the negotiations.
- The time available to negotiate.
Time: Time is a decisive factor. It’s well known that extending the negotiation timeline (time dilation) is a common tactic used by negotiators. Every negotiator should be prepared to endure long negotiations where fatigue and exhaustion can influence the final results. Mental preparedness to resist pressure and persevere (assume the role of a long-distance runner) is crucial.
Stages of the Negotiation Process
Preparation Phase
Establish objectives and strategy. Avoid setting impossible goals. Define:
- The desired goal, its feasibility, and difficulty.
- The means at our disposal.
- The counterparty we will face.
- The strategy to be used.
Opening or Growth Phase
Introductions of participants. Establish procedures: meeting days/times, meeting secretary, and potentially, measures if no agreement is reached.
Discussion Phase
The challenging part of the dialogue, often involving firm positions and few concessions. Each party defends their stance with strong arguments while opposing the counterparty’s positions. It’s crucial to master emotions, avoid anger, and never threaten or respond defensively to threats.
Solution-Sharing Phase
A positive and dynamic phase where solutions are exchanged and proposals are collected. This is a cooperative stage where parties move closer to reaching an agreement.
Closing Stage
Summarize what has been agreed upon so far and formalize provisional or definitive agreements.
Negotiation Strategy Defined
The overall approach or position adopted during negotiations to achieve the best possible outcome.
Negotiation Tactic Defined
Specific actions or methods used to achieve negotiation objectives (often referred to as the ‘moves’ or ‘techniques’ employed).
Collective Bargaining Explained
Collective bargaining refers to the dialogue process between employee representatives (e.g., unions) and employers aimed at reaching agreements on specific employment-related matters. It is often a legally recognized right that ensures the resulting collective agreements are binding.
The Collective Agreement
Defined as the formal agreement between worker representatives and employers establishing working conditions and productivity standards.
Characteristics:
- Must be in writing.
- Applies not only to the direct negotiators but to all individuals they represent.
- It is a bilateral contract negotiated between two parties (labor and management).
- Often requires filing with labor authorities for registration and official publication (e.g., in an Official Gazette) to be effective, with publication scope depending on its territorial application.